The hard thing is to see the wood for the trees

Two key questions How is the development agenda changing (and so what?)? What aid architecture?

The 20% Club and the 0.2% Club The 20% ClubThe 0.2% Club CountryAid as % of GDP (2003) CountryAid as % of GDP (2003) Rwanda Tanzania Mali Mauritania Nicaragua Brazil China South Africa India Botswana

Implications for agencies? (a) Spyglass (b) Spigot (c) Spoon (d) Spanner

In the 0.2% Club The analytics of globalisation Financing development A new regionalism? New ‘development’ issues New kinds of partnership Implications for developed country governments

Implication for governments? Aid Trade Foreign Policy ?

A new aid architecture needed?

The market structure: Walmart and the corner shops

The only sensible view of foreign policy today is one of engagement, is one of preparedness to intervene, is one of recognising that if we have a problem, the rest of the world does, that these problems can only be tackled collectively, they cannot be tackled individually, that the best form of foreign policy is therefore a muscular and a strong multilateral intervention on the issues facing us in the world today. Africa and climate change are two such issues that cry out for such an approach. We made progress at Gleneagles, but the hard part of the task is still to be performed. Tony Blair 26 June 2006

Time to stand the aid architecture on its head?

Identifying the strengths and weaknesses of aid agencies:

1. Performance/ efficiency/cost- effectiveness 10.Customer- friendly/consultative/ open-minded 19. Long term projects 2. Sector focus11. Regional focus20. Respect national priorities 3. Environmentally friendly 12. Transparency21. Rights- based 4. Large scale funding 13. Quick emergency response 22. Participatory 5. Pro-poor14. Flexible23. People- oriented 6. Grants/soft loans15. Knowledge transfer24. Internal governance 7. Able to fund infrastructure 16. Predictability25. Better monitoring 8. Technical expertise/ Knowledge banks 17. Simple procedures26. Speedy 9. Untied aid18. Mutual respect What countries want

Government I (Senior officials) JapanUSAIDADBUNDP World BankDFID Efficiency/cost effectiveness Sector focus Environ. Friendly Large funding Pro-poor Grants/soft loans Able to fund infrastructure Technical expertise Untied aid Customer friendly Overall score Ranking562413

The World Bank generally scored highly for scale, technical expertise, efficiency and sector focus, but poorly for terms of finance, consultation, flexibility and transparency. It was also thought not very cost-effective. The Asian Development Bank scored highly for scale, sector focus, customer-friendliness and regional expertise, less well for terms of finance, flexibility and speed of response. It was also thought to fall down on mutual respect and open- mindedness. UNDP scored highly on terms and transparency, and was thought to respond well to national priorities. However, it was not thought to be very efficient or to provide finance on a sufficiently large scale. The EU scored highly on mutual respect and on size, but poorly on speed and flexibility. DFID scored highly on efficiency, terms, orientation to national priorities, speed and flexibility. It was weakest on scale, ability to fund infrastructure and tying status. Japan scored well on being customer-friendly, expertise and predictability, but poorly on poverty orientation and flexibility. USAID scored well on emergency response, but otherwise poorly.

The World Bank/IDA scored highly on level of financing, concessionality, budget support, predictability, untying of aid, alignment, efficiency and long-term impact. It scored poorly on conditionality, level of bureaucracy, transparency and flexibility. The African Development Bank scored highly on level of financing, accountability, concessionality, transparency and long-term impact. It scored poorly on speed of disbursement, flexibility, transparency, efficiency, level of bureaucracy and budget support. The EU scored highly on level of financing, accountability, concessionality, untying of aid, access for CSOs to aid and long-term impact. It scored poorly on conditionality, level of bureaucracy, speed of disbursement, respect for national systems and ownership. UNDP scored highly on untying of aid, concessionality and long-term impact. It scored poorly on level of bureaucracy and speed of disbursement. DFID (ranked by two groups) scored highly on alignment, predictability and speed of disbursement. It did not score poorly on any of the characteristics identified. AFD (ranked by two groups) scored highly on alignment, predictability and speed of disbursement. It did not score poorly on any of the characteristics identified.

How to allocated resources? Think of this as a public expenditure problem

Best practice involves A comprehensive spending review, to look at the past record and set over-arching priorities for the future; A public expenditure settlement, which allocates firm amounts of money three years ahead, and which includes a contingency element; A Public Service Agreement, or contract with spending agencies, which determines objectives for the period, given the funding envelope; A procedure for monitoring performance; An annual review of funding levels, but with the expectation that changes will not be made except in the case of massive shocks; and All backed up by parliamentary scrutiny and accountability.

Sound familiar?

Interesting question: who’s in charge of the UN budget?